Malta Gaming - Remote Gaming Fact Sheet - How to Set Up a Gaming Operation

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Malta - a fiscally competitive, low cost jurisdiction in which to base your online gambling operations - whether you are a start up gambling operator or expanding into the EU.
Malta - A legitimate low tax EU jurisdiction.
5% effective corporate tax rate, no withholding, capital gains or entry or exit taxes. Malta has no inheritance or wealth taxes.

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Malta Gaming - Remote Gaming Fact Sheet - How to Set Up a Gaming Operation

  1. 1. Malta - iGaming Regulations, Licensing & Compliance Services www.acumum.com | info@acumum.com | Skype: acumum A Fiscally Competitive Jurisdiction | Single Application | Efficient, Accessible Regulator
  2. 2. Why Malta? As the first EU jurisdiction to welcome gaming - back in 2000 - Malta is an established, well reputed jurisdiction in which to start, relocate, or be based in order to expand your gaming operations. Since then, a whole industry has been built around the gaming industry with numerous suppliers, online payment providers, an advanced communications infrastructure. and a multi—lingual workforce An ex-British colony, English is an official language - but this is just one of many languages of the highly skilled work-force . Its strategic location in the Mediterranean allows for access into the rest of the EU. Part of the Eurozone, the currency is Euros; decreasing currency risk. The Malta Lotteries & Gaming Authority (LGA), is a single regulator, providing a consistent, efficient point of contact for all applications and ongoing relationships. Malta A full EU member Excellence | Superb Client Service | Cost Efficient info@acumum.com | www.acumum.com Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU) The Process The LGA has in place a singular application process for registration of iGaming operations. On successful completion, a gaming license is granted for 5 (five) years; subject to on- going compliance. Pre-Application It is highly usual and we strongly advise that preliminary discussions take place with the LGA before formal application. We can advise and prepare you as to what matters will be required to be disclosed in the discussions or, if you prefer, discuss your situation directly with the LGA. Application Part of the LGA’s determination of whether to grant a licence or not, is whether the applicant:  Fit & proper to conduct gaming business. Assessment of and enquiries with third parties in respect of persons involved in the management and financial operations of the business will be undertaken.  Is correctly prepared from a business strategy perspective. The business plan of the proposed operations will be analysed. Sufficient and detailed information needs to be submitted along with forecasts and strategies.  Has the operations & statutory requirement to meet the legal obligations expected by Maltese law. Examination of the legal foundation, terms and conditions and procedures will be looked at, as well as the application & system architecture The LGA undertakes that the assessment of stages 1- 3 should be completed within 12—16 weeks. Your Business is Global… So Is Our Advice Description of Classes Class 1: Casino games, lotteries, slots Class 2: fixed odds, pool betting Class 3: Poker, betting exchanges, skins, tournaments, bingo Class 4: Provision of remote gaming platform to other licensees (B2B) Classes 1 on 4, 2 on 4, or 3 on 4 for hosted operations Acumum - Leaders in Gaming & Intellectual Property Geraldine Noel, Managing Partner - granted the 1st ever virtual trademark by the United States Patent & Trademark Office (USPTO)
  3. 3. Schengen Area (EU) | Schengen Area (Non—EU) | Will implement later | EU State outside of Schengen The Schengen area allows for free movement of persons within its borders and includes the territory of the following 26 European Union countries and associated countries: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherland, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland. Bulgaria, Cyprus, Ireland, Romania and the United Kingdom do not participate in the Schengen cooperation. The Key Official Requirement Undertaking core compliance and reporting responsibilities, the Key Official is an essential function in every gaming operation. Acumum can assist you by recommending a pre – authorised Key Official, or if you wish to nominate such a person within your own operations, can assist that person in achieving Key Official status, including:  Guiding you through the regulatory requirements of the decommissioning or installation of hardware, addition of new games or partners, changes in the stakeholders of your operations, or other incidents that may occur within the gaming system or your operations  Helping you in the preparation of the financial reports that must be submitted to the AML from time to time The importance of the role of a Key Official cannot be emphasised enough; his or her duties include:  Sealing of servers, ensure that the seals are not broken and reporting to the LGA if they are and subsequently re-sealed  System review / certification of compliance  Incident reports – within 24 hours the LGA must be notified of any changes made to either the hardware or software of the gaming company by signing and submitting the Incident reports  Keeping the LGA updated of in respect of any changes to be made, to the pre-approved set-up of the authorised gaming operations  Monthly submission of gaming tax and annual gaming li-cense fee  Submission of the gaming licensee’s management accounts alongside the annual audit financial statements  Monthly reports ensuring players’ funds are securely and adequately held by the gaming licensee at all times – both at the control and bank account levels  Data protection compliance as a data processor  Submission of National Statistics Shared Gaming Operations Many operators find it beneficial to share business operations. Subject to review of the joint- venture agreements by the LGA, Malta rules allow for such economies of scales and co- operation between business parties. Submission to the LGA of both the joint-venture agreement and business plan must occur. Excellence | Superb Client Service | Cost Efficient info@acumum.com | www.acumum.com Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU)
  4. 4. Maintaining Malta’s reputation as a trusted, reputable gaming jurisdiction is in everyone’s interest. After all— being licensed by a reputable jurisdiction, results in added customer confidence and thereby additional revenue for you. Compliance Audits Ongoing compliance audits undertaken by the LGA at a fixed market cost (see Administrative Fees below), are an integral feature in ensuring that Malta’s reputation as a trusted gaming jurisdiction is retained. Audits take place:  After 1st year of operation  On third year of operation  Upon significant changes to the gaming system At the discretion of the LGA upon suspicion of (i) failure to abide by regulations, operational nature of the license or, (ii) misconduct. Financial & Operating Activity Reporting As part of on-going compliance and in conjunction with the assistance of the Key Official, a number of reports must be filed with the LGA:  Incident reporting change requests to infrastructure, upgrades & maintenance of gaming equipment  Decommission to obtain LGA approval to remove or move the gaming equipment  Yearly audited accounts providing a comprehensive overview of the gaming company’s operations and finances  Monthly reports as follows: Gaming tax report Gaming logs Player balances in the gaming system Players bank account statements Anti-Money Laundering (AML) & Know Your Customer Requirements (KYC) Malta takes its responsibility to and position within the global prevention of terrorist and criminal activities seriously. All prospective and licensed gaming holders must comply at all times with appropriate AML and KYC requirements and procedures. The LGA must be provided with all necessary due diligence documents in respect of its key officials, directors and shareholders. Acumum can assist you in establishing, documenting and maintaining sufficient and appropriate compliance processes and manuals:  Role & Responsibilities of the Key Official  Role & responsibilities of the Money Laundering Reporting Officer (MLRO)  Human Resources Roles & Responsibilities  Payout management procedure  Fraud Management Procedures  KYC & AML procedures Acumum’s experienced gaming lawyers, consultants & account-ants, can assist you at every stage of the process. Accounting & Back Office Acumum can provide you with full back office services  Preparation & submission of accounts & tax statements & reports  Provision of virtual office services: registered office, answering customer calls For more information, please contact us. Malta - Income Tax - 15% For senior employees - holding certain titles, employed under a qualifying contract, with gaming operations licensed with the LGA, Malta’s income tax has been reduced to just 15% for those earning over €78, 207 (ordinarily 32% at progressive tax bands). The reduction of income tax applies for a period of 5 years and is one of the lowest income tax rates within the EU. Excellence | Superb Client Service | Cost Efficient info@acumum.com | www.acumum.com Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU)
  5. 5. Malta - A Fiscally Competitive Jurisdiction Malta’s competitive tax regime provides for an effective corporate tax rate of only 5% - one of the lowest rates within the EU, following tax credits and refunds. A Malta limited company (LTD) is the most popular trading and holding vehicle for gaming operators. Administrative Fees € - Euros € - EUROS Application Fee for new license € 2,330 System Audit - Paid in advance for the execution by LGA’s approved third party certifiers / auditors € 1,770 Yearly Licence Fee € 8,500 Application fee for Renewal of Licence € 1,500 Approval Fee for Transfer or Assignment of Licence € 1,500 Approval of Share Transfer - Payable upon approval € 1,500 Approval of Simple Contractual Commercial Agreements Per year, per contract; total amount not exceed €30,000 per year € 70 Approval of Complex Joint Venture Agreements - Predetermined administrative hourly fee, agreed prior to starting approval process Compliance Audit—Paid in advance for the execution by LGA’s approved third party certifiers / auditors € 2,500 Taxes € / % Duration Class 1 Licence 4,660 First 6 months 7,000 Per month during licence period Class 1 Licence operating on a hosting platform in possession of a Class 4 Remote Gaming Licence (Class 1 on 4) 1,200 Per month during licence period Class 2 Licence 0.5% Of gross amount of accepted bets in remote betting operations Class 2 Licence operating on a hosting platform in possession of a Class 4 Remote Gaming Licence (Class 2 on 4) 0.5% Of gross amount of accepted bets in remote betting operations Class 3 Licence 5% Of real income Class 3 Licence operating on a hosting platform in possession of a Class 4 Remote Gaming Licence (Class 3 on 4) 5% Of real income Class 4 Licence hosting and managing other remote gaming operators 0 First 6 months 2,330 Per month for next 6 months 4,660 Per month during licence period Class 4 licensee hosting & managing an operator not in possession of the relevant Class 1, 2 or 3 licence, however hosting an EEA licensed Business to Consumer operator 1,165 Per month per operator, paid by the Class 4 Licensee Maximum remote gaming tax per licensee per each remote gaming licence 466,000 Per year Excellence | Superb Client Service | Cost Efficient info@acumum.com | www.acumum.com Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU)
  6. 6. Malta’s International Legal & Advisory Firm Uniquely local. Uniquely International. Located in the EU tax efficient jurisdiction of Malta, Acumum Legal & Advisory employs Maltese, UK, & international lawyers & tax accountants - with extensive on-location & off-shore international experience. Providing appropriate, cost effective, bespoke solutions. Excellence | Superb Client Service | Cost Efficient info@acumum.com | www.acumum.com | Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU) Aviation | Corporate Services | Estate & Wealth Management Financial Services | Gaming | Intellectual Property Maritime & Yacht | Residence & Citizenship Trusts & Foundations| Tax Structuring Excellence | Superb Client Service | Cost Efficient info@acumum.com | www.acumum.com Skype ID: acumum Malta Office: +356 2778 1700 260 Triq San Albert, Gzira, GZR 1150, Malta (EU) Guidance Purposes Only 2014

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